Jan. 16 (Bloomberg) -- Genworth Financial Inc., the insurer
that announced a plan today to isolate its unprofitable U.S.
mortgage insurer, said the unit’s results may improve amid a
U.S. housing rebound.

“We do feel increasingly like the business is in recovery
and earnings we expect to be much improved,” Chief Financial
Officer Martin Klein said today in a phone interview. “We’ve
seen a fairly slow but steady recovery, not just in the U.S.
economy, but in the housing market.”

Genworth said today it’s reorganizing to separate most of
the company from mortgage-insurance operations that saddled the
firm with losses and threatened its investment-grade credit
rating. The U.S. mortgage insurer posted operating losses of
$106 million in the first nine months of last year and $513
million in 2011. The unit may be profitable in one or two
quarters this year, Klein said today on a conference call.

“As we head into 2013, the business is going to continue
to recover,” Klein said.

Genworth rallied 9.2 percent to $8.88 at 3:24 p.m. in New
York, the biggest advance since Oct. 31. The bonds gained and
credit-default swaps narrowed. Genworth, based in Richmond,
Virginia, also sells life insurance and long-term care coverage.